European car sales plunged to a 19-year low in 2012 as the debt crisis took a heavy toll on vehicle demand.

The number of cars sold in the EU fell by 8.2% to 12.05 million vehicles last year, the lowest since 1993.

Over-indebted banks refused to lend to consumers who are strapped for cash as severe austerity measures pushed joblessness across the bloc to a record high of 12%.

Sales in December were hit particularly hard, falling by 16.3% to 799,407 vehicles, according to the latest figures from the ACEA European automotive association.

For the year, the UK fared much better than Europe, with sales rising by 5.3%. By contrast, sales in Germany declined by 2.9%, while Spain dived by 13.4%, France by 13.9% and Italy by 19.9%. Although the UK market is holding up, British-based manufacturers are feeling the squeeze in Europe, which typically accounts for about 40% of its sales.

Last week Honda announced it would cut 800 jobs at its plant in Swindon, although Jaguar Land Rover two days later said it would create 800 British jobs in Swindon.